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ATM Exchange Rate in Italy

Can anyone tell me if the exchange rate at a typical ATM in Italy will be the same as the published foreign exchange rate of the day? Or, does the local bank add an uptick? While at my local bank yesterday, I inquired about foreign currency and the bank's rate was .0644 above yesterday's published exchange rate + a $7.50 fee.
Thanks

ATM Exchange Rate in Italy
Posted by: LADYLYN on Aug 31, 16 at 9:01am
While at my local bank yesterday, I inquired about foreign currency and the bank's rate was .0644 above yesterday's published exchange rate + a $7.50 fee.

That looks like larceny. Get a new bank or credit union. Here is an illustrated introduction to changing US dollars in Europe. http://www.enjoy-europe.com/exchange.html. Always use ATMs at banks for the best exchange rate.

The cost of obtaining foreign currency from an ATM (foreign to you anyway, local to the machine) consists of a transaction fee and a conversion rate. When you use a bank ATM in Europe, both of these charges are set by your bank.

So, if you look for a new bank, find one which charges no transaction fee and a minimal or no conversion surcharge over the interbank rate. I have 2 credit union accounts I use for foreign travel. Both charge 1% over the interbank rate and no transaction fee. This applies both to ATM withdrawals and to credit card charges.

Oh, and janisj's warning about DCC above applies to credit card charges also. Your friendly waiter will offer your bill in dollars as well as euros. Reject, reject, reject the dollar charge. This boosts the conversion rate and splits the profit between the merchant and the company offering the service.

<<The exchange rate is not determined by the machine . . . it is determined by your own bank.>>

That is inaccurate.

The exchange RATE is the interbank rate, period. The net cost to you of withdrawing Euros from the Italian ATM is a function of (1) Interbank rate, (2) any foreign exchange fee charged by your bank (3% or more in most cases), (3) any transaction fee charged by your bank.

EU bank ATMs issue euros with no fees, the conversion entity (Maestro, Sirrus, Pulse, or some other) takes 1%, and the remaining fees/charges come from your local bank.

The conversion rates change constantly throughout the day. Published rates are typically the mid market rate at the market´s close. These rates may or may not be the actual rate used for your transaction but .0644 will be close to the .1 charged by the conversion entity.

A $7.50 fee for an ATM withdrawal on a foreign bank is outrageous. I would find a new bank by day´s end.

Thank you all for your quick replies! I will definitely ask for Euros.

But, another question - If my bank is setting the rate, wouldn't it be the same $.0644 above the exchange rate in the ATM - minus the $7.50? They do not charge any foreign transaction fees. Doesn't the local bank charge a fee for using their ATM?

Large US banks continues to get away with this practice in their favor at your expense.

Italian banks are not allowed to gouge consumers for this kind of transaction at the ATMs.

The cost structure between asking a US bank vs. using an ATM in Italy is completely different. YOUR bank charges you at every opportunity, not the Italian bank.

in US at bank.
What you pay = official rate at "certain" time + bank mark up (5-10%) + transaction fee (0-$7.50) + possible shipping fee = $$$$$$

at ATM in Italy
What you pay = official rate at "certain" time + Visa/MC charge 0 or 1% depending on whether you bank passes 1% or not + YOUR bank markup 0-1-2-3% depending on bank + YOUR bank transaction fee of 0-$5 depending on bank.

Simple answer?
The best case using ATM using best US issued ATM card = official rate.
A not-so-good case using ATM using not-so-good US issued ATM card = official rate + 3% + $5.

When using an ATM using an ATM or Debit card, there is NO component of cost added by the Italian bank when you use an Italian ATM. They all come from YOUR bank + MC/Visa.

Your bank charges a different rate when you get foreign currency at your bank in the US vs. withdrawing Euros from an ATM. As Greg says, look for a bank or credit union that doesn't have a per use charge for using an ATM (US big banks usually charge $5 per use) and doesn't charge you for foreign exchange (big banks charge 3%).

Do you have brokerage account? If so, many brokerages offer excellent terms for using foreign ATM. Not only does my brokerage not charge for use of a foreign ATM, but it will also refund any ATM charges by the foreign bank. This isn't an issue in Europe, but is in many places in the world. I get the interbank rate, plus the 1% charged by visa/mastercard/etc, no foreign exchange fee.

US banks do not set exchange rates (if you are referencing exchange rates). Most banks, but not all, assess fees which can vary as a percentage of the transaction, a fixed fee per withdrawal, or some banks charge both.

Typically, the large bail-out banks are those charging the highest fees. For example, for foreign ATM withdrawals, Bank of America charges 3% plus $5. Charles Scwab charges nothing or 0% plus $0. Many credit unions pass along the 1% exchange fee but add nothing at the local level.

<< If my bank is setting the rate, wouldn't it be the same $.0644 above the exchange rate in the ATM - minus the $7.50?>>

YOUR BANK IS NOT SETTING THE RATE. I clearly said 30 minutes before your post that the rate is the Interbank rate. The Interbank rate is the exchange rate, period.

The $.0644 is a foreign currency conversion fee. That's not part of the rate. It's a way to screw you out of money. This is why YOU SHOULD NOT GET EUROS IN THE UNITED STATES and instead just withdraw them when you arrive in Italy. The additional $7.50 surcharge is just another facet of the same bilking.

As for the "same $.0644" issue - check your bank agreement and see what it charges you for foreign withdrawals. Banks are federally regulated and need to have this information easily accessible. Chase is bad enough at 3.5% fee plus $3 per transaction. If your bank is charging 4-4.5% and $7.50, get an account elsewhere for travel - like Capital One (no fee, no withdrawal cost) or a credit union (1% fee, no withdrawal charge).

Yes, my post was overly simplistic -- but the TOTAL COST of getting any money out of an ATM IS DETERMINED BY YOUR BANK. Yes -- they all use the Interbank rate -- but the % they tack on adds to that so the 'actual exchange rate' is determined by your bank.

But they charge much more when you walk into your branch and ask for foreign currency.

The bank ATM's in Italy don't, but there are a few ATM's that charge fees similar to the ones you find in the US at convenience stores like 7-11. Just use ATM's at a bank to avoid that extra fee.

My credit union gives me the interbank rate (on the day I withdraw - it fluctuates during the day and they give me the lowest rate of the day) plus they tack on 1%.

You didn't say which bank you use, but my credit union has a low daily ATM limit ($400). I have to remember to convert that to euro and calculate the exchange rate before I attempt to withdraw money. At today's interbank rate, $400 = €358.24. I have to take the 1% fee off that amount to determine how much I should select on the ATM to withdraw without going over my $400 limit. At this rate, I would be able to select €350.

kybourbon on Aug 31, 16 at 1:51pm
My credit union gives me the interbank rate (on the day I withdraw - it fluctuates during the day and they give me the lowest rate of the day) plus they tack on 1%.

Ditto my credit union with the 1%. When I asked about that I was told that the 1% goes to Mastercard, a middleman in the transaction. Neither the European bank nor my credit union take a fee, but MC takes a scoop.

No- you won;t get the Interbank rate published online - that's only if you are changing millions of $. But your bank should only charge you 1 or 2 % above that - versus 10% above for a bureau de change or changing cash at your actual bank.

Electronic exchanges should always be much cheaper - banks HATE having to deal with cash - it involves too much labor.

Janisj - Yes -- they all use the Interbank rate -- but the % they tack on adds to that so the 'actual exchange rate' is determined by your bank.

But they charge much more when you walk into your branch and ask for foreign currency.

Yes. This I understand. "rate" or "rate + mark up fee+ transaction fee = the "rate" I am paying.
I will use my card at the ATM next week - even if I have to go to 3 of them to get the amount of Euros I need to pay for my hotel ( discount offered for cash)

Both your bank at home and the ATM you are using in Italy may set limits. So if your bank at home allows the amount you need per day, you could go to different ATMs from different banks and meet your needs. Some ATM machines have a per withdrawal limit but will allow you to make multiple withdrawals with that limit.

Another gotcha is that the"daily" clock is based on your home bank. When I ask my bank in the US, they usually don't know how they really count a day, using EST, CST, MST, PST, etc. Evening and next day morning might be a different day in Europe, but same day according to your bank clock.

Responding specifically to the rate given in Italy: Last year I used 3 or 4 bank ATMs in Italy and got fabulous exchange rates each time, less than 0.1% markup over the published rate on XE.com. Later with the same card did much worse at 3 or 4 bank ATMs in Germany, about 1.5% markup over the published XE rate.

So Italian bank ATMs give great rates is what I am trying to say. And yes, some Italian ATMs limit withdrawals to 200 and 250 euros, just cancel the transaction, walk 20 yards and try the next one.

yestravel - Exactly! I have read that many (most?) ATMs have a $250 per transaction limit. My bank has $1000 per 24 hours. Unless I can find an ATM that allows more, I will have to do 4 transactions to get appr. $850 Euro. But, I am assuming I can use the same ATM for all four transactions. My bank does not charge transaction fees for the ATM.

Ladylyn: the restrictions at Italian ATMs mentioned above do not seem to be the norm, I just hit one of them. Also, if there is a restriction on the ATM it will be in euros. I had good luck with the common ATMs on the street from Banca Monte dei Paschi di Siena, and the postal bank Poste Italiane Bancoposta at FCO airport.

Italy is credit card friendly. Do you need so much cash? Are you renting an apartment with a cash arrangement?

>>>My credit union in the US, associated with a US university, tacks on a lot more than that.<<<

bvlenci - Credit unions are regulated by each state. State laws vary. Mine is in KY and I get the interbank rate plus 1% on the debit card and a Visa and Mastercard I have through them. My cousin in OH looked into opening one with his college and OH laws allow less favorable transactions fees.

>>>yestravel - Exactly! I have read that many (most?) ATMs have a $250 per transaction limit.<<<

I have not seen an Italian ATM with that low of limit in years. Typically, they are at least 500€. At today's rate on Oanda, to get 850€ (your post is confusing because you posted dollar and euro with the 850), the interbank rate would be 850€ = $948.81. You would have to tack on your bank's fees (% mark-up and a per transaction fee if they charge one).

>>>Last year I used 3 or 4 bank ATMs in Italy and got fabulous exchange rates each time, less than 0.1% markup <<<
>>>So Italian bank ATMs give great rates is what I am trying to say<<<

Misinformation. Once again, it's not the Italian bank charging fees (unless you are using a private ATM, not one bank associated). It's your US bank charging them.

Not sure why it matters where the OP will spend that "sort of" cash. If you read her posts you will see she stated, "I will use my card at the ATM next week - even if I have to go to 3 of them to get the amount of Euros I need to pay for my hotel ( discount offered for cash)"

yestravel, Michael thank you I was really beginning to think I could not communicate at all.

We are traveling around this trip. The B & B in Parma is cash only. In Venice we are staying at a B & B that offered a discount for cash - of course if I really 'wanted to over think it' I guess I could compare the discount to the cost of withdrawing the Euros at the ATM.

>>> I get it. But even paying cash for lodgings -- one doesn't pay on arrival -- you pay on departure. So no need to take out €1000 a pop.<<<

I never said I was paying at arrival - just that I needed cash to pay for the B & B, which by the way is not 1000 Euros. My local bank's limit is $1000 or approximately 850 Euros. Enough to pay for the room and have a little left over to function for a few days.

Also, I wish I knew how to get through 6 days with only 300 Euros. My husband would be so happy! All kidding aside, I guess you use your debit cards more often than we are used to.

>>Misinformation. Once again, it's not the Italian bank charging fees (unless you are using a private ATM, not one bank associated). It's your US bank charging them.

No, I'm not talking about direct bank fees from the home bank account, I am talking about exchange rates which is a murky area. People who say, "Rates are set by the _____ and you always get the market rate at every bank in every country and in every ATM" are spreading rumors. Banks play tricks with rates, just like credit cards do, and you are not ever guaranteed to get some market or published rate using a bank ATM.

I proved that German banks slice a bigger profit from ATM withdrawals than Italian banks do by setting the exchange rate about 1.5% lower than the going rate, taking at least ten times a greater profit margin than Italian banks take.

tom...the actual exchange rates and exchange are done by the shared teller network. The biggest ones in the past have been plus which is controlled by visa and cirrus which is controlled by mastercard. These shared teller networks have rules for exchanging currencies in line with visa and mc regulations respectively. In that sense, the bank owning the ATM does not deal with the exchange; it sends the transaction through the shared teller network. For simplicity sake, although it is somewhat more complicated, they do use the interbank rate with a 1% mark up. Your bank may pass this along to you, may add its own mark up (generally 2% making a total of 3%) and may then add other fees. Any transaction going through the shared teller networks, in general, as an out of country charge, are not charged by the local atm although over the past years more private ATM's have gotten around this by adding their own fees.

Now a new scam is the use of dcc by atm's for cash withdrawals. You are told for your convenience you can lock in the exchange rate by having the atm convert the currency. As Nancy Regan once told us, just say NO as in NO. For this reason, in general, you get the same rate of exchange if you use a machine at the airport or downtown or wherever.

If you are staying in an apartment, then, yes, you might have to pay upon arrival. But the OP is staying in a B&B. I gather this B&B doesn't accept credit cards? Which are preferable and convert your money at the same rate -- assuming your ATM/Debit card comes from the same bank.

Anyway, no need to get all the money out at one time. Then you'd be carrying a large amount, which defeats the advantage of an ATM. There are convenient ATMs all over Rome and, in fact, all over Italy, in the smallest towns. You can make several stops.

It's been about 15 years since I made my first trip to Europe cold turkey without getting foreign money first. I just stop at a bank ATM before leaving the airport. So far that's worked like a charm. Now of course I have some euros left from my last trip.

xyz: I agree with the 1% comment and have seen that 1% rate markup on credit cards, and saw it again in ATM withdrawals in Germany. Still, did not see it in Italy. On my first withdrawal at FCO I even got BETTER than that day's published rate. I did not check the next day, maybe I got that day's rate. In any event, I just got incredible rates (basically no commission, no rate mark up) in 4 ATM transactions in 3 cities in Italy last year.

Another possibility I did not consider earlier: maybe the rate fluxes with the amount withdrawn, all my Germany transactions were less than 200 euros, and all the Italy ones were about 500 euros. Possibly there is a hidden ATM fee in the rate and so the rate is better for higher euro transactions?

I looked hard on the web once for answers to these questions, didn't rally get a good answer.